The usury rate curve increases slightly on January 1, 2022 after several months of successive declines. A development that can facilitate access to credit for the most vulnerable borrowers.
The usury rate is a crucial element as it plays the role of regulator in terms of credit. This is the maximum legal threshold beyond which banks cannot grant the loan.
It is the APR that is taken into consideration to check if the usury rate is well respected. The APR is the reference rate that allows you to compare the overall cost of the various offers and to assess whether a proposal exceeds the usury threshold. It takes into account the nominal rate, all costs incurred by the loan (brokerage costs, administration costs, for example), as well as any insurance premiums of the borrower. There are different usury rates depending on the nature of the loan (real estate loans, bridging loans, consumer credit, etc.), the amount of the loan and its duration.
The usury rate aims to protect the borrower from abuse. Excessive interest rates can in fact put the borrower in an uncomfortable, even risky financial situation. In other words, this ceiling, which obliges banks not to stray too far from average market rates under penalty of penalties, protects the borrower from possible over-indebtedness. To calculate the usury rate, the Banque de France collects the APR required for the various categories of loans in the previous quarter from a representative sample of credit institutions. These rates, increased by one third, establish usury thresholds and are published quarterly in the Official Gazette of the Banque de France. However, the constant decline in the usury threshold in recent months, combined with more restrictive concession rules, could have led to a jaws effect on some categories of borrowers.
After several months of falling usury thresholds, rates rose slightly to stand at 2.4% for loans between 10 and 20 years, or an increase of 0.01%. This weak rise can give new life to risky or more fragile profiles, hitherto penalized and excluded from credit. The drop in tariffs allows profiles wishing to carry out their real estate project in 2022 to continue to benefit from it ideal credit conditions.
For negotiate a competitive financing offer, the support of an experienced mortgage broker is your best bet. This professional will be able to verify the feasibility of the borrower’s project, optimize his practice and direct him to the lender most able to finance him at the best conditions.